国产麻豆

It is wise to take a thoughtful approach to sale readiness through advance planning that protects your personal estate and wealth post-sale before jumping into discussions
with potential buyers. With time and the right team and process, buyers can optimize outcomes for themselves as well as the business and its other stakeholders.
By David Stahl, CFA, CFP庐

After years of hard work, long hours and dedication to growing your business, you have decided to sell. Perhaps you have been contemplating selling for awhile and were waiting for the right time. Perhaps you are hearing from more and more peers who have sold over the past few years. Maybe the latest potential buyer to call you seems like a great fit to grow the company from here. Regardless of the reason, selling a business is a significant milestone, requiring not only preparing the business for sale, but also ensuring personal financial readiness before you close (and ideally before you sign that Letter of Intent).

And while you may be ready, just as importantly, there are likely quite a few interested buyers looking to talk to you. While other industries experienced a slowdown in closed deals since 2022 that is just now starting to reverse, the environmental services and waste management industries largely dodged the broader trends and continued to see ongoing consolidation. As we head into 2025, the major players continue to signal aggressive M&A intentions. With significant liquidity available to pursue these strategies and a positive macroeconomic backdrop, the coming years could continue to represent an attractive opportunity for businesses in this space ready to transition to new ownership.

At the same time, it is wise to take a thoughtful approach to sale readiness before jumping into discussions with potential buyers. With time and the right team and process, buyers can optimize outcomes for themselves as well as the business and its other stakeholders.

Selling a Business Takes Some Time, So Plan Accordingly
Ideally, you should begin preparing a business for sale one to two years before going to market. Good planning can be done in less time too, but generally you want to allow space for thorough preparation, which includes addressing personal tax and estate planning considerations, ensuring the business is market-ready and aligning the transaction with personal financial goals.

I advise my clients preparing for a business transition to take these critical steps first: update your personal balance sheet, model out financial independence outcomes post-sale, assemble a team of experienced professionals and explore a range of personal estate and wealth planning strategies

Use a Personal Balance Sheet for an Overview of Assets and Liabilities
A personal balance sheet provides a comprehensive snapshot of your financial position. The document should detail all assets, liabilities and ownership structures.
While seemingly straightforward, this exercise is crucial. It lays the groundwork for several aspects of planning involving a business owner鈥檚 personal financial team, including income tax strategies, estate planning, and financial independence assessments. By gaining a deep understanding of your finances, you can more effectively evaluate how sale proceeds will impact your future.

Determine if Sale Proceeds Will Support Your Financial Independence After the Sale
To assess whether the expected sale proceeds will support your long-term financial independence, it is helpful to model ranges of possible post-close outcomes. While this can be done with 鈥渂ack of the napkin math,鈥 at this stage owners are typically in discussions with investment bankers experienced in this industry.
A good banker will be able to provide a reasonable range of top-line valuations, while also having visibility into what the likely buyer pool will require in terms of cash vs. earn-outs, rollover equity requirements, and other important terms relevant to a deal beyond just the price. A handful of both well-known public companies and notable private-equity firms are very active in the environmental services arena, so common deal structures can likely be reasonably modeled.
For many, the sale of a business represents the owner and their family鈥檚 primary source of future wealth. Therefore, carefully consider whether modeled after-tax proceeds will provide adequate resources to maintain your desired lifestyle, retire comfortably, or pursue other ventures. If the analysis reveals a gap, you know you may need to take steps to enhance the business鈥 value before entering the market, or that you will need to make adjustments personally after sale if you are just ready to sell regardless.

Create a Multidisciplinary Advisory Team
Every successful business sale requires a team of experts such as the following:
鈥 Investment bankers to help prepare the business for sale, identify potential buyers, negotiate terms, handle issues arising during the process, and get the deal across the finish line.
鈥 CPAs to ensure accurate financial reporting before and during diligence, and to determine and proactively manage the sale鈥檚 income tax implications.
鈥 M&A attorneys to support negotiations, draft and review contracts, and protect your legal interests.
鈥 Financial advisors to provide guidance on pre-sale personal financial readiness and support the transition in your balance sheet post-sale.

In addition to external advisors, when appropriate you will need to engage key internal team members鈥擟FO, key executives, etc.鈥攊n the preparation process. These individuals will play an integral role in readying the business for sale, navigating the due diligence process, and may play a major role in attracting buyers wanting (and willing to pay for) a strong team in place beyond the owner.

Explore Personal Estate and Wealth Planning Strategies
Depending on the value of your personal net worth including the business subject to sale, you will typically want to include in your preparation personal estate and income tax strategies.

If the sale is expected to generate excess liquidity beyond your financial needs, pre-sale estate planning can help minimize future estate taxes and preserve wealth for future generations. (Note: If you are not familiar, estate tax is separate from income tax and applies upon your passing before future generations receive funds. At 40 percent above a certain threshold of wealth, it is a steep cost that can be mitigated with sound planning over your lifetime.) Closely held businesses often represent some of the best assets to include in such planning.

Consider the following pre-sale strategies:

  • Sell or gift a portion of your business while leveraging valuation discounts, which refers to a reduction in the business鈥 appraised value (for these purposes only, it does not impact the value of the business in the marketplace). This approach can maximize what you are able to gift during your life under estate tax law, benefiting future generations while reducing overall estate tax exposure.
  • A commonly used vehicle in this context is a Spousal Lifetime Access Trust (SLAT). A SLAT enables you to transfer assets out of your estate while retaining indirect access to those funds through your spouse, creating a 鈥渟afety valve鈥 for unforeseen financial needs as long as that spouse is alive. This strategy is particularly valuable when the business鈥 ultimate sale price is uncertain, or if you are nervous gifting larger amounts before you have even seen the liquidity from a business sale.
  • If charitable giving is part of your financial plan, the timing and structure of your contributions can significantly impact your tax outcomes. The year of a business鈥 sale often sees a spike in income, making it an opportune time to benefit from optimizing the mix of capital gain and the higher ordinary income tax rates, leveraging charitable contributions to offset the latter.
  • Asking your CPA to run a multiyear tax projection allows you to strategically plan when to make charitable contributions to optimize tax savings. Additionally, choosing the right structure for long-term charitable giving is vital. A clear charitable giving plan, developed with your advisory team, ensures your contributions align with your personal values and financial objectives.
  • If your business is eligible for the qualified small business stock (QSBS) exclusion, you may be able to exclude capital gains tax on the sale of certain C corporation stock. This only applies in very specific circumstances, but consulting with your CPA during readiness planning and鈥攊f your business qualifies鈥攎aking sure nothing occurs before close to change that, can result in a tax-savings wind fall.

These strategies are most effective when implemented well in advance of a sale. Many personal estate and wealth planning opportunities are either reduced or missed as a transaction approaches. And, aside from that, even the smoothest sales process is a significant strain on you and your team, leaving little time or mental energy available for this level of strategic thinking about your personal planning. Starting early provides the time necessary to implement these strategies effectively and positions you to make the most of your sale, while securing your financial future.

Saying Goodbye to Your Life鈥檚 Work
Selling a business is deeply personal and includes broader aspects beyond the financial impact. Many owners are emotionally attached to their businesses, which can represent decades of effort and identity. Taking the time to reflect on your 鈥渨hy鈥 for selling now, and keeping that handy throughout the process, can provide clarity and confidence throughout.
Whether you intend to retire, start a new venture or pursue philanthropic interests, having a clear vision for life after the sale is as important as the sale itself. Discuss your plans with family members and key stakeholders to ensure alignment and to reduce potential conflicts.

Strategic preparation and a strong support system will help you navigate the transition with confidence and maximize the benefits of your hard-earned success. While the journey may be challenging, thoughtful planning helps ensure a smooth transition, providing you with the financial freedom and peace of mind to embark on the next chapter of your life. | WA

David Stahl is a wealth management partner at Plante Moran Financial Advisors, where he provides personal financial advisory services to closely held business owners and private equity professionals. He can be reached at [email protected].

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